The soaring popularity of smartphones is crushing demand for point-and-shoot cameras.

Smartphones popularity is threatening the once-vibrant cameras sector, as firms scramble to hit back with web-friendly features and boost quality, analysts said.

The rapid shift to picture-taking smartphones has torn into the camera sector dominated by Japanese firms including Canon, Olympus, Sony and Nikon.

"We may be seeing the beginning of the collapse of the compact camera market," Nobuo Kurahashi, analyst at Mizuho Investors Securities, said.

According to news.com.au, figures from Japan's Camera and Imaging Products Association echoed the analyst's grim prediction.

Global shipments of digital cameras among Japanese firms tumbled about 42 percent in September from a year ago to 7.58 million units, with compact offerings falling 48 percent, according to the Association, the report said.

Part of the decline was due to weakness in debt-hit Europe and a Tokyo-Beijing territorial spat that has sparked a consumer boycott of Japanese products in the Chinese market, the report added.

According to the report, but smartphones have proved a mighty rival to point-and-shoot cameras, analysts said, offering an all-in-one phone, computer and camera with comparatively high quality pictures and Internet photo downloading.

"The market for compact digital cameras shrank at a faster speed and scale than we had imagined as smartphones with camera functions spread around the world," Olympus President Hiroyuki Sasa told a news briefing this month.

Firms are scrambling to keep improving picture quality, offer features such as water-proofing and expand their Internet features, like allowing users to share pictures through social media networks, the report said.

Camera makers said that growth areas include emerging economies, where many own neither a camera nor a smartphone, along with replacement demand among compact-camera owners.